Welcome to the new AFA CEO, Helen Morgan-Banda

AFA National President

 @AFA_Pres

To start off this edition of the AFA “Financial Adviser” magazine, I am delighted to welcome our new AFA CEO, Helen Morgan-Banda who commenced her role on 2 August 2021.

The AFA Board, in response to the challenges being faced by the AFA and its members, made the decision to look more broadly for a new leader, including considering candidates from outside Australia. Key to our decision to appoint Helen, was her experience as an accomplished CEO of member associations. Most recently she was the CEO of the Law Society of New Zealand (which has 15,000 members) and prior to that she was the CEO of the Royal New Zealand College of General Practitioners. In these roles, Helen has managed significant disruption akin to that being experienced by financial advisers and she has demonstrated a deep understanding of the issues being faced by our members. She has an acute understanding of the AFA culture and values and her skill set complements that of our existing team that the AFA Board believe will enhance our value to our members.

Welcome Helen! The AFA looks forward to our next phase with you at the helm. We have made it through the end of financial year but not COVID just yet! Who would have thought that mid-way through 2021, parts of Australia would be again in extended lockdown. This creates a sense of familiarity or déjà vu, but also added complications to an already testing environment. As we enter the second half of the year, I wanted to reaffirm the AFA’s priorities for the remainder of 2021 - 1. Supporting advisers through 2021 and the

FASEA exam. The AFA would like to have as many advisers as possible take the exam and is here to support all those who need a helping hand. Encouragingly, the Government has recently drafted legislation that will provide an extension into 2022 for those advisers who attempt the exam twice before the end of 2021. 2. Supporting AFA communities and the wellbeing of our members. In these challenging times, it is critical that we support one another, so please reach out if you need support, and be there for one another. 3. Advocate for sensible reforms. As the

Government introduces the last of the Royal

Commission Recommendations, the AFA is committed to pursuing a more workable regulatory regime for financial advice.

AFA National Hybrid Conference – Not to be missed!

In just a few more weeks, the AFA will hold our flagship event for the year, our National Conference. To manage the COVID challenge, we are running a hybrid event this year to deliver quality content nationally and provide localised events. The AFA Conference will provide members with a quality adviser driven agenda focussing on current issues. Already announced are Minister Jane Hume and new ASIC Chair Joseph Longo in his first announced engagement with advisers. There are also 30 CPD hours on offer, which is very handy! It is with regret that in a period such as this, we are not able to facilitate a face-to-face conference and engage personally with members. I hope you make the time to join us, and COVID permitting, attend your local state conference event, and to engage in our state based Great Advice Awards.

As we prepare for Conference and the celebration of 75 years of an authentic vibrant community, I have been engaging with past leaders of the AFA. I wanted to share this quote from Dennis Bateman, former National President, on what the AFA means to him.

The AFA provides a member with a sense of community, inclusion, moral support during the good times and the difficult times. It is important for members to know that someone is out there batting for them on issues that are of importance to them and they are not alone in their endeavours to deal with the everchanging landscape and moving of the goal posts of regulations that govern the financial advice world.

As your current President, I assure you that the AFA team strives to support our members and the advice community as we navigate our way through this period of mass disruption. We have a fine history of past leaders to emulate, and we aspire to continue their legacy. Let’s be proud of 75 years of the AFA!

AFA Advocacy 2021

The prime focus of the AFA’s efforts this year has been to represent our members as the remaining Royal Commission recommendations reach legislation phase. The AFA’s priority has been to make this legislation as practical as possible for the advisers and minimise the impact on your already compliance heavy businesses. As an adviser, I understand the impacts of the continued legislative barrage on financial advice. I thought it fitting to provide a summary of the work we have been doing

1. Life insurance claims handling – at the end of last year the

Government passed legislation limiting the ability to manage claims to certain persons, of which advisers were not included. As a proud life insurance adviser, who takes pride in claims management for my clients, this infuriated myself and many of my peers. The AFA lobbied until this issue was rectified via regulations to allow financial advisers and their staff to manage clients' claims.

2. Annual renewal legislation – upon review of the draft legislation the AFA discovered that the legislation required advisers to provide FDSs a day after the FDS period ended, which was not possible. We lobbied the Government to ensure that this was rectified, to ensure client ongoing fee agreements would not be jeopardised and unnecessarily terminated, and we were successful in an outcome 3. We are currently engaging with the Government on the upcoming Single Disciplinary Body, Breach Reporting and

Compensation Scheme of Last Resort legislation – the final of the Royal Commission legislation. Our focus is to achieve a sensible approach to these pieces of legislation and limit the costs imposed upon advice businesses and ultimately consumers.

4. Of course, in 2022 when the Quality of Advice review is reporting, which now will include the LIF review, we will ramp up our continued focus on our advocacy for life insurance. The AFA is continually engaging with Government and the Regulators on life insurance issues including the

APRA intervention on IDII and the new income protection product design, significant premium increases, and the LIF review structure. We are talking to both sides of politics and educating them about how crucial a vibrant life insurance profession is for Australian society, the advice process, our challenges and the importance of the maintenance of life insurance commissions. We are also advocating for choice for consumers in how they pay for life insurance advice.

Small business advisers must be able to cover the costs to provide advice, otherwise Australia risks not being adequately protected. Also, $12 billion in life insurance claims paid in a year is something both advisers and life insurers should be proud of!

Working together with other Associations

In recent months, there has been reporting about a lack of industry collaboration. Whilst I am of the view that greater collaboration between associations is positive and is something that we are continually seeking to build upon, I wanted to provide some insights into how the industry and associations are currently collaborating. The AFA and the FPA have been working together since mid 2019 representing life risk advice formally with the AFA / FPA Joint Life Insurance Taskforce and we will continue to as the next chapter of LIF plays out. Following the Royal Commission recommendation on life insurance, both associations agreed it was necessary to represent a united front on risk advice. In the risk space, both the AFA and FPA have worked with the major insurers through the CALI Group (Choice and Access to Life Insurance), which has done important research and educated both sides of Government on the value of life insurance. These groups are most definitely on the same side working for advice and the retention of commissions. The AFA works closely with the other associations, and we will continue to do so. Association collaboration is commonplace in finding common ground on critical industry issues. We have all played a role is pushing the Government to understand the regulatory and cost burden of the advice process and the excessive and unnecessary costs associated. That is why ASIC is undertaking its CP 332 Promoting access to affordable advice for consumers review and this is the first sign of the pendulum swinging back. There is hope!

WA State Director, Stephen Knight, meets Australia’s newest Senator, WA Senator, Ben Small.

Member advocacy and promoting advice

We are hearing from members of the importance of bringing a structured unified message about the value of advice to both the Politicians and the broader community. We hear you and we are working to empower our members to help spread these messages. Keep an eye out for our Member Advocacy Pack and grassroots engagement. In these challenging times that financial advisers are going through, I am continually hearing the value of “community” for advisers. This was demonstrated in a recent webinar that I participated in with Dr Adam Fraser who partnered with AIA and Deakin University on the Australian Financial Advisers Wellbeing Report. The report detailed the mental strain that the incessant reforms are placing on financial advisers – compliance and admin fatigue, roadblocks to meeting the needs of clients, new challenges in providing advice, and even burnout, stress and depression. The report is a challenging read, as was the session with Dr Fraser, but a key finding was that advisers who turn to others, have someone to communicate with and those that embrace community are in a much better frame of mind and are coping better. Please, if you are struggling, turn to someone in your AFA community, be it a peer, dealer group representative, or your AFA State committee. We are here for each other, and what matters most is that financial advisers around Australia make it through these troubling times. Finally, I would like to thank the AFA Board and staff who have lifted whilst the AFA has been in search for our new CEO to ensure that we continue to support and represent our members. In particular, I must acknowledge Phil Anderson who has stepped in to perform both the Acting CEO role and his existing Policy and Advocacy role and never missed a beat. Phil sincerest thanks from myself, the Board and our members for your dedication. Stay safe.

Michael Nowak

AFA National President

We surveyed nearly 13,000 Australians in conjunction with 1, to better understand the benefits of financial advice. Almost 9 out of 10 respondents who have received advice believe it frees them from financial worry and stress2 . At IOOF, we believe in the value of financial advice. ioof.com.au/financial-advice

Important Information: © IOOF Holdings Ltd. All Rights Reserved. Bridges Financial Services Pty Ltd (ABN 60 003 474 977, AFSL 240837), Consultum Financial Advisers Pty Ltd (ABN 65 006 373 995, AFSL 230323), Lonsdale Financial Group Ltd (ABN 76 006 637 225, AFSL 246934), Millennium3 Financial Services Pty Ltd (ABN 61 094 529 987, AFSL 244252), RI Advice Group Pty Limited (ABN 23 001 774 125, AFSL 238429) and Shadforth Financial Group Limited (ABN 27 127 508 472, AFSL 318613) are members of the IOOF group (comprising IOOF Holdings Ltd and its subsidiaries). 1. The True Value of Advice research study of 12,643 Australians was undertaken in July 2020 in conjunction with CoreData Pty Ltd. 2. 88% of the 11,615 advised clients surveyed. 21052670AB

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